Debt Collection for a Foreign Company which Works with Italian and Foreign Companies in Italy

A foreign company, which imports products from Italy (import) as well as the foreign company, which works bringing products in Italy (export) or which has business relationships with other Italian companies or which anyway works in Italy, may need to carry out a procedure of debt collection, facing consequently both the difficulties arising out of the Italian law and the peculiarities of our Italian law. An Italian qualified lawyer can collect the debt.

The Foreign Company and the Debt Collection: The Negotiations

Firstly, a letter of notice (messa in mora) shall be drafted, by means of which the due payment shall be requested on behalf of the client: since this moment, many possible situations could arise out of the procedure; our law firm is anyway able to manage each possible situation in a quick and effective way. The foreign

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company, indeed, shall be advised concerning the negotiations with the debtor, also by means of drafting deeds, which may define the terms and conditions regarding, for example, any payment by instalments the debtor commits to fulfil as well as possible involved settlement(s).

The Foreign Company and the Italian Company: The Judicial Phase

In case no agreement is entered into with the Italian company or the same does not fulfil what agreed after the breach of contract, it is necessary to file a claim before the competent Italian Court (Tribunale Italiano) to obtain the fulfilment of duties as well as the compensation for damages. It will be necessary to make a decision upon which legal activity is more appropriate and which deed / proceeding may be the best in the concrete case. For example:

• Claim (ricorso) ex Art. 702 bis: the decision of the Court is quicker but it is necessary that some necessary assumptions are all fulfilled in order to obtain the issuance of this deed, e.g. the grounds of each decision must be adequately proved and there must be no need to resort to witnesses;

• Ordinary deed (atto di citazione): the typical first deed of the civil proceeding set forth under Italian law, where the Court will evaluate documents and witnesses to decide upon which part will win the civil case.

The Foreign Company and the Debt Collection: The Injunctive Relief (decreto ingiuntivo)

In case the debtor is not available to pay spontaneously, or in case the negotiations should not be successful, it shall be necessary to file a judicial proceeding before the competent Italian Court (Tribunale italiano).

A law firm, on a case-by-case basis and depending on the respective debt and debtor, could advise the client regarding which deed may be more successful (i.e. may more quickly and surely achieve the complete debt collection):

• An injunctive relief (decreto ingiuntivo): provided that some terms and conditions set forth under the Italian law are all fulfilled, it is possible to file for a legal injunction, which has the same effect of a sentence, addressed to the debtor, who is ordered to pay. This injunction is a very fast one, because the Court shall have to evaluate only that all terms and conditions, set forth under the Italian law (legge italiana) have already been fulfilled, and it allows to obtain forthwith a judicial recognition of the debt;

• An ordinary proceeding: if it is not possible to file for an injunctive relief, it shall be necessary to file an ordinary proceeding before the competent Italian Court (which shall be a Tribunale or a Giudice di Pace). In these cases, the timing shall be inevitably longer and a complete legal analysis shall be necessarily carried out in order to prove the existence of the debt and, consequently, to get a favourable sentence by the competent Court.

The Foreign Company and the Debt Collection: The Enforcement Proceeding

Unfortunately, also in case of a positive outcome of an injunctive relief or of a sentence at the end of an ordinary proceeding, it is not taken for granted that the debtor is available to pay his/her debt. Our law firm is able to advise with the utmost care a foreign company concerning how to proceed with the following proceeding, which may be the most accurate one with the specific purpose of quickly and surely collect the debt:

• Foreclosure (pignoramento): it is an enforcement proceeding by means of which both some assets (like for example bank accounts, shares, obligations) and some goods owned by the debtor (like for example cars) are frozen, with the specific purpose of proceeding with the request of either transfer of money (found cash or deposited on bank accounts) or sale of frozen assets / goods, in order to obtain an amount of money equal to the due debt;

• Attachment (sequestro conservativo): before the foreclosure, there could be a huge risk: the debtor could sell all his/her goods and assets; for this specific reason, provided that some terms and conditions set forth under the Italian law are all fulfilled, it is possible to file to the competent Italian Court a request concerning a freezing order, i.e. an interim injunction that restrains a party from disposing of or dealing with his/her goods and assets, so that these latter ones shall be the target of a following foreclosure;

• Revocatory action (azione revocatoria): in case the debtor has sold all his/her goods and assets notwithstanding the foreclosure or the attachment, it is possible to file a request to the competent Italian Court to obtain a clawback decision, which declares null and void the deed(s) of sale;

• Application for bankruptcy (istanza di fallimento): if the debtor company is in an economic situation of serious insolvency (stato di insolvenza), it is possible to make an application to the competent Italian Court to request the bankruptcy of the company, with the following sharing of remaining company’s goods and assets to the benefit of its creditors; however, generally speaking, in cases of bankruptcy is very difficult to manage to collect, in whole or in part, the respective debt.

• Admission to the liabilities in a bankruptcy proceeding (insinuazione al passivo): in case a bankruptcy proceeding concerning the debtor company is already in force, it is possible to file a proper application for the admission to the liabilities in the same proceeding, in order to participate to the possible sharing of the goods and assets of the debtor company.

As the instruments set forth under the Italian law, which may be available to the creditor(s), are several and each of these instruments is governed by specific provisions (and consequently with different expenses to bear for the client), our law firm, thanks to the expertise gained during many years, is able to advise its clients with the utmost care, since the beginning, about the specific procedure to be chosen in order to obtain the best possible result.

Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.